FDIC Law, Regulations, Related Acts

1000 - Federal Deposit Insurance Act

(a) INTEREST RATES.--In order to prevent discrimination
against State-chartered insured depository institutions, including
insured savings banks, or insured branches of foreign banks with
respect to interest rates, if the applicable rate prescribed in this
subsection exceeds the rate such State bank or insured branch of a
foreign bank would be permitted to charge in the absence of this
subsection, such State bank or such insured branch of a foreign bank
may, notwithstanding any State constitution or statute which is hereby
preempted for the purposes of this section, take, receive, reserve, and
charge on any loan or discount made, or upon any note, bill of
exchange, or other evidence of debt, interest at a rate of not more
than 1 per centum in excess of the discount rate on ninety-day
commercial paper in effect at the Federal Reserve bank in the Federal
Reserve district where such State bank or such insured branch of a
foreign bank is located or at the rate allowed by the laws of the
State, territory, or district where the bank is located, whichever may
be greater.

[Codified to 12 U.S.C. 1831d(a)]

[Source: Section 2[27(a)] of the Act of September 21, 1950 (Pub.
L. No. 797), effective September 21, 1950 as added by section 521 of
title V of the Act of March 31, 1980, (Pub. L. No. 96--221; 94 Stat.
164), effective March 31, 1980, and as amended by section 101(g)(2) of
title I of the Act of August 10, 1987 (Pub. L. No. 100--86; 101 Stat.
563), effective August 10, 1987; and section 201(a)(1) of title II of
the Act of August 9, 1989 (Pub. L. No. 101--73; 103 Stat. 187),
effective August 9, 1989]

(b) INTEREST OVERCHARGE; FORFEITURE; INTEREST PAYMENT
RECOVERY.--If the rate prescribed in subsection (a) exceeds the
rate such State bank or such insured branch of a foreign bank would be
permitted to charge in the absence of this section, and such State
fixed rate is thereby preempted by the rate described in subsection
(a), the taking, receiving, reserving, or charging a greater rate of
interest than is allowed by subsection (a), when knowingly done, shall
be deemed a forfeiture of the entire interest which the note, bill, or
other evidence of debt carries with it, or which has been agreed to be
paid thereon. If such greater rate of interest has been paid, the
person who paid it may recover in a civil action commenced in a court
of appropriate jurisdiction not later than two years after the date of
such payment, an amount equal to twice the amount of the interest paid
from such State bank or such insured branch of a foreign bank taking,
receiving, reserving, or charging such interest.

[Codified to 12 U.S.C. 1831d(b)]

[Source: Section 2[27(b)] of the Act of September 21,
1950 (Pub. L. No. 797), effective September 21, 1950, as added by
section 521 of title V of the Act of March 31, 1980 (Pub. L. No.
96--221; 94 Stat. 164), effective March 31, 1980]